“Identity theft rings are the modern face of organized crime,” said U.S. Attorney Luger. “Identity thieves often use fraudulent identities to obtain goods, which they can sell for cash. These defendants are charged with obtaining stolen cell phones through identity theft and fraud, and then selling them for exorbitant profits. It is only through close collaboration and cooperation between each of the law enforcement agencies involved in this case that we are able to stand here today having taken out one of the largest criminal enterprises in the Twin Cities.”

St. Paul Police Department Assistant Chief Bill Martinez said: “We want our communities to understand that this isn’t just about someone simply swiping the phones we hold in our hands. These are not petty crimes. Those thefts and robberies filtered into other crimes.”

United States Secret Service Special Agent in Charge Louis Stephens said: “Today is a very good day for the people of Minnesota. A significant organized crime network is no longer at work. Today’s success is the result of the close and collaborative working relationships between local, state and federal law enforcement agencies, and federal prosecutors. When we combine our resources, leverage our various areas of expertise, and work as one, we make big things happen and significant crime is stopped in its tracks.”

Minnesota Bureau of Criminal Apprehension Superintendent Wade Setter said: “Today’s indictments in this complicated case are truly the product of investigative partnerships. The Minnesota Financial Crimes Task Force worked this case along with the U.S. Secret Service and the St. Paul Police Department in a multi-jurisdictional approach necessary to investigate this type of crime.”

University of Minnesota Assistant Vice President and Chief of Police Gregory S. Hestness said: “Last fall a wave of robberies targeted University of Minnesota students and their cell phones in campus area neighborhoods. Officers of the University of Minnesota Police Department worked literally thousands of hours in robbery suppression, and we saw results. However, without addressing the underlying criminal enterprise creating a market for these phones, we were not doing everything possible to protect our students. UMPD was honored to contribute to this critical major investigation. Today’s successes are remarkable, but also emblematic of the strong partnership of Minnesota law enforcement at the local, state, and federal levels.”

According to the indictment and documents filed in court, from at least 2006 through 2014, JAMAL MUSTAFA directed the Organization to use stolen identity information to obtain cellular telephones and other mobile devices for the purpose of trafficking them throughout the United States and internationally. JAMAL MUSTAFA, KANAN MUSTAFA, NASER MUSTAFA, EDWAN MUSTAFA, NIZER MUSTAFA, BILAL MUSTAFA, TALAL MUSTAFA, and MOISES NAVARRO-CAZALES, owned and operated 13 mobile device stores in the Twin Cities metropolitan area. The Organization used these storefronts to buy devices that they knew had been illegally obtained, including purchasing thousands of cellular phones from runners and other persons who got the phones through robberies, burglaries, shoplifting, and fraud and identity-theft schemes.

With the assistance of AHMED SUNOQROT, the Organization moved inventory and money between their stores, which the Organization used as fronts to funnel the illicit proceeds of their criminal activity.

As charged, various members of the Mustafa Family provided stolen or fraudulent identity information to the runners, including names, dates of birth, social security numbers, credit card numbers, passport information, and driver’s license numbers of victims. Some of the runners operated solely within Minnesota, while others travelled to Arizona, Idaho, North Dakota, Iowa, Wisconsin, Illinois, and Utah to obtain devices. The Organization arranged out-of-state travel for the runners and paid their expenses. One runner was arrested in Utah in 2013 with more than 80 counterfeit identification documents and genuine victim-information documents. This runner used those documents to open lines of credit at various retail outlets to make fraudulent device purchases.

The runners were instructed by the Mustafas to obtain phones by contract-fraud and subscription-fraud schemes. In such schemes, runners used real stolen identities to obtain cell phone contracts. At times, the runners obtained “family plans” or “business accounts.” In so doing, runners were sold phones at deeply discounted prices by the legitimate retailers. The full retail price of an iPhone 5s in the United States is approximately $648. Under a two-year contract, the same phone is sold for approximately $200. Runners then opened accounts entitling them to obtain as few as one discounted phone, and as many as 30. The runners then shipped or delivered the phones back to the Mustafas, via one of the thirteen Twin Cities storefronts, or shipped the phones to wholesalers in other states for sale overseas. A new iPhone 5s retails for between $1,000 and $1,200 overseas.

Other runners engaged in street-level violence or burglary to obtain phones. The Sunrise Group, a burglary ring that traveled throughout the Upper Midwest for the purpose of breaking into WalMart stores to steal cell phones, iPads, and other electronic devices, provided electronic devices to the Mustafa Family on several occasions. The Mustafa Family made requests of the Sunrise Group for large quantities of new phones, and would act as a fence for the stolen merchandise.

Assistant U.S. Attorney Karen Schommer, Chief of the Major Crimes Section; Assistant U.S. Attorney Steven Schleicher, Chief of the Special Prosecution Section; and Assistant U.S. Attorney John Marti are handling the prosecution of this case.

U.S. Attorney Luger thanked the St. Paul Police Department, United States Secret Service, University of Minnesota Police Department, Minnesota Department of Public Safety and Bureau of Criminal Apprehension, Minnesota Financial Crimes Task Force, United States Postal Inspection Service, Internal Revenue Service Criminal Investigations, Homeland Security Investigations, Edina Police Department, Minneapolis Police Department, Plymouth Police Department, Federal Bureau of Investigation, and the United States Marshal’s Service for their assistance in the investigation.